The role of private sector in APEC forum
By Lee Tsao Yuan
SINGAPORE (JP): A distinctive feature of economic dynamism in the Asia Pacific is that it is driven by the private sector. Thousands of businesses have taken advantage of the progressive lowering of trade barriers and of the relaxation of investment deregulation to engage in regional activities ranging from assembly-line manufacturing to sophisticated financial services.
Strategic alliances, franchising agreements, subcontracting relationships and other forms of business partnerships are being forged across country boundaries, either for home or third country markets. The larger business corporations, comprising not only the first-tier global players from the US, Europe and Japan but also increasingly those from developing Asia, have already integrated business activities which span the Asia Pacific. These companies perform a valuable function in contributing towards economic integration, while at the same time enhancing cross- cultural communication and understanding, and helping to establish a community of Asia Pacific economies.
The Economic Leaders established the Pacific Business Forum (PBF) in November 1993, and asked the group of business leaders to "identify issues APEC should address to facilitate regional trade and investment and encourage the further development of business networks throughout the region." The 33-member PBF met three times this year, and presented their report to President Soeharto, the current Chairman of APEC, in October 1994. The PBF report is aptly titled "A Business Blueprint for APEC : Strategies for Growth and Common Prosperity".
There are four key areas discussed in the report. The first area is trade and investment liberalization, to be completed by the year 2002 for developed economies and 2010 for developing economies. This ambitious time-table reflects the urgency that the PBF accords this task, and their concern that the accomplishment of this not be so distant that "it will be irrelevant to the current agenda of the business community". In recognition of the importance of investment flows and the existence of many barriers to foreign investment, the PBF recommends the adoption of an investment code, the incorporation of elements of the code into domestic investment laws where appropriate and the development of a legally enforceable and binding code as soon as possible. Not least is the recommendation of an immediate standstill on all new barriers to trade and investment.
The second area is business facilitation. Recommendations include making transparency in regulatory and administrative regimes a priority; expediting customs processing and visa applications; harmonization of product standards; establishment of APEC dispute settlement mechanisms and implementing sound business ethics.
The third area comprises human resources and business development policies. There is recognition of the need to encourage greater participation by small and medium enterprises (SME) in regional business activities, such as by fostering linkages between large enterprises and SMEs; developing local supporting industries; and encouraging technological cooperation among SMEs by offering administrative and fiscal incentives. Infrastructure development, including the establishment of an information infrastructure, should proceed on a region-wide basis, for example, by formulating a regional infrastructure, with inputs from both public and private sectors.
The fourth area is the importance of enhanced cooperation between government and the business sector. In particular, the PBF recommends the establishment of an APEC Business Advisory Forum as a means of continuing the dialog between the APEC Economic Leaders and the business community. The contribution of existing regional business networks, such as the Pacific Economic Cooperation Council, Pacific Basin Economic Council, CACCI and Asia Pacific Business Network is explicitly recognized, both in fostering closer personal and corporate relationships, and in contributing to the formation of government policy.
It is timely that APEC, an inter-governmental organization, not only acknowledges the important role played by the business sector in the Asia Pacific economy, but has also asked the business community for recommendations as to how governments can facilitate regional trade and investment. It is to be hoped that business sector inputs, from the PBF as well as other regional business organizations, are indeed taken seriously by APEC governments. This would make for a viable partnership, in order to achieve growth and common prosperity in the Asia Pacific.